- Hong Kong/Shenzen exchanges will link by December – Moltke-Leth
- Shanghai/Hong Kong volume cap to be eliminated – Moltke-Leth
- Extreme complacency is a key theme this week – Hardy
- WTI oil faces band of resistance between $44.90 and $46.20
- Gold is looking tired after two lower highs – Hansen
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By Clare MacCarthy
Chinese equities were the biggest mover in overnight Asian trade with the Shanghai composite index adding an impressive 2.45% for its highest one-day gain since late May. This advance, says Christoffer Moltke-Leth of Saxo Bank's Singapore trading desk, follows news that a link-up between the Hong Kong and Shenzen
exchanges is on track to open by year's end, a move that will accommodate greater volumes and encourage more foreign involvement in Chinese equities.
China sentiment was further boosted by reports that the daily volume cap on the existing Shanghai/Hong Kong link is likely to be eliminated at the same time the new link goes live, Moltke-Leth adds.
We might see more records today:
European equities have followed their Asian counterparts higher but the world of forex is mired in indifference as traders look past the horizon to Fed chief Janet Yellen's Jackson Hole appearance on August 26 as well as several other central bank events globally in September.
USDJPY, Moltke-Leth says, "completely shrugged off news of another burst of disappointing Japanese data in which both gross domestic product and business spending came in well below forecasts. "In general we've seen very small ranges in FX markets," Moltke-Leth concludes.
"Extreme complacency in asset markets is one key theme for the week ahead," reports Saxo's head of FX strategy, John J Hardy.
WTI facing band of resistance between $44.90 and $46.20
In commodities, Friday's trend which saw crude oil shorts being hunted down remains in place and WTI is testing the 50% retracement of its post-Brexit selloff. "How much further it has to go remains to be seen but if you look at the chart we really would need to take out $46.20 before we can talk about a return to the recent highs," says Ole Hansen, head of commodity strategy.
Gold, meanwhile, is looking tired after two lower highs this so far this month. The yellow metal had a weak close on Friday despite an initial boost from US retail and dollar developments. The target now is trendline support at $1,317 with $1,300 the key to maintaining bullish momentum
Jackson Hole is a while off but the market is already hoping for some Fed signals. Pic: iStock
Clare MacCarthy is deputy editor at TradingFloor.com
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